Resilience-based political risk mitigation in foreign infrastructure investment: evidence from developing countries

However, the quantitative selection of political risk management strategies (PRMS) with consideration of the mechanism by which political risk influences FII remains undescribed. This study addresses this deficiency by utilizing multinomial logistic regression to quantify the impact factors influencing strategic choice.

Findings identify a range of significant factors arising from the political risk factors experienced by FII and their resilience to them for PRMS selections. On the basis, three scenarios governing PRMS selection are indicated: 1) strategies to reduce political risk in scenarios of high political risk coexisting with high project vulnerability; 2) strategies to reduce project vulnerability in scenarios of high political risk coexisting with low response capability; and, 3) strategies to increase response capability where high political risk coexists with low FII’s resilience.